Trustees talk turkey on taxes: carbon & property

More discussion on Jan. 13

By John Colson

Sopris Sun Staff Writer

Carbondale’s elected leaders on Tuesday talked about two revenue-raising ballot questions currently being pursued by the town, one a “carbon tax” proposed for inclusion on utility bills for local residential and commercial consumers, the other a property tax to pay for a variety of capital improvement projects.

The discussion was held at a special meeting of the Board of Trustees, called to talk about the possible ramifications of putting one or both questions on the ballot in April, 2016.

Energy tax

The town, in conjunction with the Community Office of Resource Efficiency (CORE) and the Clean Energy Economy for the Region (CLEER), has been working for years on ways to boost energy efficiency in government, residential and commercial buildings.

A proposed fee linked to energy use, or “carbon tax,” is meant to both encourage local businesses and residents to reduce their energy consumption habits and provide funding for CORE and CLEER to continue their work helping residents and businesses with such things as energy audits and building improvements that increase the energy efficiency of buildings.

According to Mayor Stacey Bernot, the town already has spent in the neighborhood of $1.6 million since 2007 on energy-efficiency programs intended to reduce Carbondale’s carbon footprint, meaning the amount of energy consumed by local residents, business and government facilities.

Under what is known as the Carbondale 2020 program, the town has set goals of increasing energy efficiency and cutting energy use town-wide by 20 percent, reducing the use of carbon-based fuels by 25 percent, and producing 35 percent of the energy used here from renewable resources, all by the year 2020.

Much of the funding to pay for these environmentally-oriented goals has been in the form of energy-impact mitigation money (formally called mineral severance tax revenues and mineral lease fees), which are paid by energy companies doing business in this part of Colorado.

But those funds have been drying up in recent years, in response to plummeting oil and gas prices and vast reductions in the pace of oil and gas drilling in Western Colorado.

The idea of a carbon tax, according to Bernot, is a way to create a permanent fund for continuing the CLEER and CORE programs.

“This is our best first step to get a dedicated funding source,” the mayor declared at Tuesday’s meeting, an idea that found agreement among others on the board of trustees.

Erica Sparhawk of CLEER and Lucy Kessler, outreach coordinator for CORE, told the trustees that at a recent community meeting, attendees were generally positive about the idea of the carbon tax, although Kessler noted that there were some who worried what the estimated $7 fee on utility bills would mean for low-income residents.

That idea was picked up by Trustee Katrina Byars, a single mom who characterized herself as a low-income resident.

“I am 100 percent behind it,” she said of the 2020 goals. She added, however, that the additional fee on her utility bill would be a hardship for her and her two children, whose limited means have occasionally meant she went without a meal in order to be sure her kids were getting enough food.

She also suggested that the town might be better advised to spend its money on broader effort to encourage the use of renewable energy, rather than energy-efficiency programs, as a way of helping with the national effort to wean people off their dependence on carbon-based fuels.

That brought firm rebukes from the mayor and Trustees Pam Zentmyer and Frosty Merriott, who all argued that the town has been working hard on increasing energy efficiency among residents, businesses and in government facilities.

To switch that focus, Zentmyer said at one point, would be “irresponsible” given the funds and effort that already have gone into the existing programs.

And, the mayor said, the town has yet to get voter feedback on these kinds of programs.

Regarding the possible ballot question, Bernot said, “I’m actually excited about this, to see where it falls. I think we need people to weigh in on this.”

The trustees ultimately decided to direct staff to write up a proposed ordinance and ballot question, to be presented to the board at a meeting on Jan. 13, for possible inclusion on the April ballot.

Capital fund

Town officials have been talking for months about a need to come up with money to pay for large-scale capital projects, such as major street work or coming up with a town-wide transit system, which recently have been at least partially funded out of the general fund operating budget and partially by mineral severance tax receipts and mineral lease fees.

Continued reliance on general-fund money is not sustainable, officials have said, and a new funding source is needed in light of the fact that the mineral severance taxes and mineral lease fee revenues are expected to decline.

Talk of a property tax hike has become the main focus of these discussions.

“I think the reality is, we need more revenues and more resources to tackle some of these problems,” the mayor said at Tuesday’s meeting.

The town already has a couple of different property taxes in place, including a 1.5-mill levy to pay off earlier street improvements and costs of creating parking for local residents and businesses, as well as two separate mill levies (1.75 mills, and 2.094 mills) that provide revenues for the town’s general fund.

But with ongoing capital maintenance costs valued at hundreds of thousands of dollars per year, and a wish list of capital projects that would cost more than $3 million, the town is feeling strapped for cash.

According to Town Manager Jay Harrington, a property tax increase of 3 mills would generate around $390,000 per year, and in three years or more could add up to enough money to take on a large capital project.

After considerable discussion, the trustees agreed that there should be a ballot question in April, at the same time as a trustee election, that asks voters to approve a 3-mill tax hike with a 10-year sunset clause.